How to calculate your Gross Income (GI)
Your gross income is the total money you earn through wages, interests, dividends, rental income, royalty income, capital gains, business income, farm income, unemployment, and alimony. It includes your salary, interest, income from investments, and any income you made through business, trade, or investments.
How to calculate your Adjusted Gross Income (AGI)
This is your GI minus your IRS deductions: things like IRA contributions, moving expenses, alimony paid, self-employment taxes, and student loan interest.
GI - Deductions = AGI
How to calculate your Modified Adjusted Gross Income (MAGI) and why it's important to healthcare
The MAGI is the magic number that determines if you qualify for a tax subsidy to lower the premium or out-of-pocket expenses through an Individual or Family health policy through the exchange.
Your MAGI is your ADJ with some items added back and counted again.
AGI + IRA Contribution Deductions + Student Loan or Interest Deductions + Excluded Foreign Income + Employee Savings Bonds used to pay higher education + Employer-paid adoption expenses = MAGI
It's simpler than it seems
For most people, the AGI is the same as their MAGI. .
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